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Rise in Franchised Restaurant Jobs Weakens

Papa John's now hiring managers
photo by bmm

ROSELAND, N.J.—Private -sector franchise jobs in the United States increased by 16,520 during the month of January 2014, compared to the 75,000 jobs by all of small businesses with under 50 employees, according to payroll services provider ADP.

Although larger in number, small business hirings of companies under 50 employees grew year-over-year by only 2 percent. Franchised establishments did better. Franchised establishments increased year-over-year hiring rate by 3.1 percent, largely fueled by its biggest sector, restaurants. Hirings at franchised restaurant also grew jobs by 3.1 percent. Business service franchises have been a hotbed of hirings, growing their jobs by 0.7 percent in January compared to December and 4.5 percent year-over-year.

"During the month of January, franchises created 16,520 new jobs, less than half the number created in December 2013," said Ahu Yildirmaz, senior director of the ADP Research Institute. "Although still a net contributor with ten consecutive months of strong gains, job creation among franchise restaurants weakened notably in January compared to prior months. In fact, our data shows that last month's franchise restaurant gains were significantly lower than the monthly average posted over the past 12 months," Yildirmaz added.

Quick service restaurant franchisee Keith Miller, chair of the lobbying Coalition of Franchisee Association, is a little surprised by the 0.2 percent uptick in January hirings in franchised restaurants over December and year-to-year growth rate. "As I understand it, restaurant sales were down in January because of bad winter weather. So it's surprising to hear that hirings are actually up, albeit the growth is somewhat depressed."

The ADP National Franchise Report measures monthly changes in franchise employment derived from ADP's actual transactional payroll data. It is produced by ADP in collaboration with Moody's Analytics, Inc. Moody's uses a portion (see methodology, pdf) of the aggregated payroll dataset with half a million private establishments, nearly 20 percent of private-sector workers, to determine employment trends of franchises.to determine employment trends of franchises.

The table below presents U.S. franchise employment growth over time, measuring current month growth, year-over-year changes, and the average monthly growth rate over the past 12 months.

ADP National Franchise Jobs Report, January 2014

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